German court rules for refund of nuclear tax

Germany's Constitutional Court on 7 June ruled that the nuclear fuel tax is illegal. Environment Minister Barbara Hendricks said the ruling was a "colossal nuisance" as well as a slap in the face for the previous coalition under Chancellor Angela Merkel that was in charge when the tax was introduced in late 2010. The verdict overrules a decision by the European Court of Justice in 2016, which found the tax did not breach European Union laws.

Power companies E.ON, RWE and EnBW were hit hard by Merkel's 2011 decision to phase out nuclear power by 2022, following the Fukushima accident. The fuel tax had initially been part of a deal between the government and the utilities whereby, in exchange for the tax, they were allowed to extend the service life of their nuclear reactors. However, after Fukushima, the government decided to shut all while still levying the nuclear fuel tax. Between 2011 and 2016, nuclear plant operators were liable for payments of €6.285bn. The tax required operators to pay €145 per gram of nuclear fuel each time they exchanged a fuel rod.

The ruling is seen as a major victory for the power companies which are now in line to reclaim about €6.3bn ($7.1bn) plus interest. This is the second recent success for the utilities after a court ruled in December that the nuclear phase-out violated some of their property rights.

Merkel said the ruling would not endanger Germany's budgetary goals. Earlier, the Karlsruhe-based Constitutional Court said the tax was "formally unconstitutional and void", adding the government did not have the legal competence to claim it. E.ON said the ruling meant it would be refunded about €2.85bn plus €450m in interest, which would boost its net profit and lower its net debt, Reuters reported. RWE expects a refund of €1.7bn plus about €200m in interest. EnBW said it has paid €1.44bn.

Last year, the utilities were also told by the government that they must pay €23.6bn into a new state fund to finance the future storage of nuclear waste. This was €6.2bn more than the companies had set aside. Repayment of the fuel tax may now compensate for this.

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